Asian Shares Tread Water, On Track For Weekly Rise

Pedestrians
walk past at an electronic board outside a brokerage in
TokyoThomson
Reuters

By Lisa Twaronite

TOKYO (Reuters) - Asian shares got off to a lackluster start on
Friday but were still on track for a winning week, while the euro
remained close to nine-month lows after downbeat data.

Euro zone bond yields dropped to record lows after Germany
reported its economy unexpectedly shrank in the second quarter,
raising expectations of more European Central Bank easing
measures.

On Wall Street, U.S. stocks rose on Thursday after a rise in
jobless claims suggested the U.S. Federal Reserve will be in no
hurry to hike interest rates, and after Russia's leader made
conciliatory comments about Ukraine.

"Most equity markets in Europe and the Americas ended the day
higher, likely bolstered by the 'good news is bad news'
presumption that weak economic data would elicit an expansionary
policy response, and by conciliatory comments from Russian
President Vladimir Putin," strategists at Barclays said in a note
to clients.

On Thursday, Putin told Russian ministers and members of
parliament in Crimea that Russia would stand up for itself but
not at the cost of confrontation with the outside world.

MSCI's broadest index of Asia-Pacific shares outside Japan
<.miapj0000pus> was flat in early trade, on track for a
weekly gain over 2 percent.</.miapj0000pus>

Japan's Nikkei stock average <.n225> edged down slightly,
but was poised to gain over 3 percent for the week.</.n225>

U.S. Treasury yields remained close to recent lows, with the
yield on the benchmark 10-year U.S. Treasury note at 2.405
percent in Asia, not far from its U.S. close of 2.398 percent on
Thursday. A week ago, it fell to 2.349 percent, a level not seen
since June 2013.

Yields in Europe slid to even lower levels after the weak German
data, which followed figures showing a similar second quarter
contraction in Italy and stagnation in France, Germany's biggest
trading partner.

The yield on Germany's 10-year bond briefly traded below 1
percent for the first time to 0.988 percent, according to traders
who contribute data to trading platforms. Spanish and French bond
yields also fell to record lows.

The euro last traded at $1.3361 , steady on the day but not far
from last week's nine-month low of $1.3333. It was also flat
against the yen at 136.96 .

The greenback edged slightly higher to 102.52 yen .

In commodities trading, the weak economic data weighed on crude
prices. U.S. crude shed about 0.1 percent to $95.53 a barrel
after losing more than $2 in U.S. trade.

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